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JaCi Wallace
With Inflation Rising, Is This a Good Time to Get a Mortgage?
Below is timely and original content for Weintraub & Wallace readers from our favorite mortgage lender, Dan Tharp of Guild Mortgage. He shares with us his expertise about getting a mortgage during inflationary times. Enjoy — JaCi Wallace and Elizabeth Weintraub
Inflation has been the word du jour of late, and we all feel it. My ah-ha moment was when I filled up my tank a few weeks ago at my favorite gas station, and gas was $6 a gallon! Unfortunately, we are not alone in this pain, as folks are feeling this worldwide. According to an energy data tracking company, gas prices in the U.S. ranked 70th among the 170 counties tracked. For our friends in Germany, gas is pushing $9, while in Hong Kong, it’s over $11!
Having been a mortgage professional in Sacramento for two decades, I get asked a lot, “Is this the right time to buy?” and second to the other most popular question, “What’s your rate?”. These are excellent questions, as I, too, seem to always focus on the financial benefits of homeownership. Thankfully, my new homebuyers remind me daily that owning a home is not a purely financial investment but a life-changing event. It provides stability for your family in a neighborhood you love and creates lasting memories as you turn that house into your home.
I am strongly inclined that you are reading this blog because you have been considering buying a new home. And I suspect the current economy might be putting a damper on those dreams. Are you basing this mood on emotion and fear? Have you considered the actual benefits of owning your piece of the pie? With home prices way up and inflation increasing the cost of life’s basic expenses, is now the right time to dive into your first mortgage? And if you wait, could you be priced out of the market altogether? You might not be entirely surprised by my answer. If you are ready for a long-term commitment and can comfortably afford the monthly mortgage payment and ongoing homeownership costs, then YES, YES, YES. It may be your perfect time to buy.
Let me hit you with some financial data regarding inflation and buying versus renting. According to a Stanford University study (January 2020), residential real estate has historically been an “investment safe-haven” during inflationary periods. In addition, during another moment of surging inflation (the 1970s), home prices rose relative to the size of the economy. Great news for homeowners since it meant their home’s increasing value helped offset rising costs elsewhere.
For my renters who have been stalking the market but are now not sure they want to buy, I always ask, “Is your rent going down?” According to CNN Business, rents in Sacramento jumped 19.5% from 2020 to 2021. For those wanting to make the leap to owning a home, “rising rents will remain a motivating factor even as for-sale home prices and mortgage rates continue to climb,” said Danielle Hale, Realtor.com‘s chief economist.
With home prices seeing such a jump over the previous few years, I have to drive the point with my new buyers that few of us are lucky enough to find our dream home the first time. So, think about compromising to find that sweet, happy medium instead of trying to get everything you want. The power of homeownership starts with your first purchase, and buyers have to start somewhere so they can eventually get to where they want to go. So, reach out to your favorite realtor to find that balance between home size, neighborhood, price, and all the bells and whistles.
Is Buying a Home a Hedge Against Inflation?
Homeownership, for many, is the ultimate American dream. Of course, people may not want to own a home for many reasons, but there’s no denying that being a homeowner can hugely impact your net worth. According to a CNBC.com article (Sept 2020), in 2019, homeowners in the U.S. had a median net worth of $255,000, while renters had a net worth of just $6,300. Let that soak in for a minute.
However, don’t think this answers all your financial needs. Buying a home is a big deal and not something to take lightly. Take your time to review the financials with your realtor, your mortgage person, and possibly a financial planner. Owning a home is a big responsibility to pay for and maintain. If you don’t feel you can stay rooted in that home for at least a few years, then renting might be the best route.
The above information is for educational purposes only. All data, loan programs, and interest rates are subject to change without notice. All loans are subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for complete eligibility requirements on tax deductions.
When you are ready to buy a home, please call Elizabeth Weintraub Broker / JaCi Wallace, RE/MAX at 916.233.6759.
Sacramento Realtor has Oral Surgery and Request for Repairs.
Sacramento Realtor has Oral Surgery and request for repairs go hand in hand. Only in real estate can you not take a few days off to heal up and this was no exception. Two repair requests came in and a boatload of work. Even when we are under the weather our clients come first. One request was so ridiculous that escrow fell apart. The other one had many local ordinances that we wondered how would it close? The buyer’s agent from Woodland had a list of repair people who did the work at half the cost. The buyer’s agent set all the work to be billed to escrow! Sheri has been terrific. Luckily my resources helped pull this escrow together, she is terrific.
I am still working just staying off the phone and working on the computer. All are full ahead of steam. My sellers are out of state so needless to stay they are thrilled. The motto of this story is if you get sick for any reason surround yourself with giving people and you can get through everything. this Sacramento Realtor is grateful beyond belief. Elizabeth Weintraub and team can sell your home and we don’t take off TIME without full coverage from our team. Call us today at 916-233-6759.
— JaCi Wallace
Sacramento Realtor Weintraub & Wallace Realtors
Shop for a Mortgage Without Hurting Your Credit
Shop for a mortgage without hurting your credit score is an interesting blog that is written by our preferred lender, Dan Tharp. Enjoy — JaCi Wallace.
Do you have to pull my credit? I don’t want you to hurt my score that I have worked so hard to maintain.”
Let’s set the record straight first, having a lender pull your credit for a mortgage will have little to no effect on your score, also called a FICO score. The bureaus are very clear – FICO scores ignore inquiries made in the 30 days prior to scoring. If your lender or multiple lenders pull your score within 30 days, the inquiries won’t affect your scores while you are rate shopping.
Applying common sense: You could apply for three credit cards, and that would have an immediate impact on driving your scores down. But applying for three mortgages, the bureaus understand that you will only obtain one mortgage.
Advice: If you are serious about getting approved for a mortgage loan, don’t be too shy about giving the lender what they need (SS #, date of birth, etc.) so they can provide you with an accurate quote. By not allowing them to pull your credit, it’s akin to going to the doctor and not letting them check your blood pressure or not sticking that annoying piece of wood on your tongue – They can’t help you without the right information.
Tips to Keep Your Scores Low: If you’re shopping for a home or thinking of refinancing, it’s good to know how everyday credit behaviors can affect your scores. Here are some tips:
First, keep a cushion on your credit cards. Thirty percent of your credit score is dependent on how much you owe versus how much you can borrow. Amount Owed calculates (1) What you owe versus (2) How much your credit limit is. The bureaus want to see at least 70% of your credit available. If you can keep your cards at least 70% available credit, your credit scores should improve.
Second, don’t make major purchases on credit before making a mortgage application, including opening a store charge card just because it will save you 20% or more on a washer/dryer set or for any other appliance or furniture piece. Wait until your realtor hands you the keys to your new home to start making those big purchases.
The reasons for this are two-fold. Many store charge cards are often opened with a limit matching your initial charge, rendering them 100% utilized – terrible for a FICO score, as discussed above. And, two, opening a new charge card has a negative FICO impact anyway.
Third, make your monthly payments on time — even the ones that are in dispute. You may not want to pay that $100 wireless phone bill, the one that you think you don’t owe, but remember that Payment History accounts for 35% of your credit score. Even one late payment — or collection — and your credit score can drop.
It’s often a better remedy to pay that disputed bill today than to be relegated to a higher mortgage payment every month because you didn’t get a better rate.
If you need a few pointers to improve your scores, call me, we can review a more detailed analysis of tricks and methods we have learned over the years. Also, we work with some very talented and local credit specialists that we can refer you to. You would be surprised at the big difference a small change can make.
Call Elizabeth Weintraub, Broker at 916.233.6759.
| — Dan Tharp
916-257-1470 Branch Manager, Guild Mortgage NMLS# 280913
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Should We Be Afraid of iBuyers like Zillow?
Should we be afraid of iBuyers like Zillow? Have you have heard the crazy news about Zillow Offers, which is owned and operated by Zillow. The popular real estate website, that makes near-instant cash offers on homes – a practice known as iBuying? Zillow basically buys the house online directly from the seller, slaps on paint, makes a few repairs, and then turns around and sells it. Many of us in real estate and mortgage lending was starting to worry this could create an unfair market advantage. Zillow could buy multiple homes in a particular area and then manipulate or artificially inflate home prices. To be fair, Zillow and Redfin have issued statements denying this.
The experiment has failed as Zillow, the country’s 2nd largest iBuyer in the country, has shut down its home-buying operations. At the end of the 3rd quarter, Zillow reported it had lost $420 million and had to lay off 25% of its workforce, about 2000 people, right before the holidays. Effectively ending their attempt at flipping homes using their famed technology coined “Zestimate,” aka the estimate of a home’s market value.
What is the point of all this, and why is it so important to me? Selling and buying real estate is a relationship business. Having been in mortgage lender for almost 20 years now, it always comes back to relationships. Home selling should not be an automated process in my opinion. We need to remember this is someone’s most significant asset in most cases, and they should be working with a local, professional, reputable realtor, not a Zillow robot.
Zillow went against this model, and it failed. I have been telling clients and referral partners my stance on Zillow for years – not a fan, as you can imagine. Still, they have become a necessary evil for many of us because of their market share and advertising dominance. Personally, I hope this recent fail on their part is a wake-up call for the masses – Get back to being local and build the people and business around you, in your own neighborhoods! I know we all love Amazon, but I am begging we don’t go down that road with the Zillows of the world. Let’s bring this back to the relationship piece, based on real people, with actual knowledge of your area.
Should we be afraid of iBuyers like Zillow? Now, there is still an opportunity for institutional buyers where that “iBuyers” platform might be the right path. But let your realtor, the professional, guide you on all your options and be part of this decision-making process. The seasoned agents I work with every day, take California law and their fiduciary duty to heart; they are genuinely there to give you helpful advice and counsel.
If you are interested in buying or selling a home please contact Weintraub & Wallace Realtors with RE/MAX Gold and Elizabeth Weintraub, Broker. We can be reached at 916-233-6749. Another very interesting blog from our preferred lender, DanTharp.
A Litter Box For Sellers Who are Selling a Home Where Cats Live
A litter box for sellers who are selling a home where cats live is an important topic. I read a post the other day by an agent on Active Rain who said her sellers kept their cat’s litterbox in the master bedroom closet, and while that may work on some level for people, I can’t imagine it myself.
Other people stick a litterbox in the bathroom and don’t seem to mind litter granules stuck between their wet toes after a shower. I suppose there are some pet owners who also like to poop with their cats and call the critters into the bathroom when the urge hits, but a line needs to be drawn when your home goes on the market. At that point, positioning an odor-free litterbox in the right place can be the difference between selling that home or watching a buyer run out your front door with a napkin over her nose.
Read more in my personal blog today about Here is an Odor Free Litterbox Cats Actually Use this is a litterbox for sellers who are selling a home where cats live. If you have cats, dogs, horses, cattle, chickens, goats, sheep, iguanas, birds or? Call us we have sold homes with all of these and more. We can be reached at 916-233-6759. JaCi Wallace is with RE/MAX Gold DRE# 00773532. Elizabeth Weintraub DRE# 00697006 is an independent broker, combined we are Weintraub & Wallace Realtors. Call us or email us at elizabeth@elizabethweintraub.com
